America's economy
美国经济
Are we there yet?
我们到目的地了吗？
America’s recovery will be much slower than that from most recessions; but the government can help a bit
比起大多数衰退国的经济恢复而言，美国将恢复的更慢；但美国政府能有所帮助
Sep 16th 2010 sites/default/files/images/images-magazine/2010/09/18/ld/20100918_ldp001.jpg
“WHITHER goest thou, America?” That question, posed by Jack Kerouac on behalf of the Beat generation half a century ago, is the biggest uncertainty hanging over the world economy. And it reflects the foremost worry for American voters, who go to the polls for the congressional mid-term elections on November 2nd with the country’s unemployment rate stubbornly stuck at nearly one in ten. They should prepare themselves for a long, hard ride.
The most wrenching recession since the 1930s ended a year ago. But the recovery—none too powerful to begin with—slowed sharply earlier this year. GDP grew by a feeble 1.6% at an annual pace in the second quarter, and seems to have been stuck somewhere similar since. The housing market slumped after temporary tax incentives to buy a home expired. So few private jobs were being created that unemployment looked likelier to rise than fall. Fears grew over the summer that if this deceleration continued, America’s economy would slip back into recession.
Fortunately, those worries now seem exaggerated. Part of the weakness of second-quarter GDP was probably because of a temporary surge in imports from China. The latest statistics, from reasonably good retail sales in August to falling claims for unemployment benefits, point to an economy that, though still weak, is not slumping further. And history suggests that although nascent recoveries often wobble for a quarter or two, they rarely relapse into recession. For now, it is most likely that America’s economy will crawl along with growth at perhaps 2.5%: above stall speed, but far too slow to make much difference to the jobless rate (see article).
Why, given that America usually rebounds from recession, are the prospects so bleak? Because most past recessions have been caused by tight monetary policy. When policy is loosened, demand rebounds. This recession was the result of a financial crisis. Recoveries after financial crises are normally weak and slow as banking systems are repaired and balance-sheets rebuilt. Typically, this period of debt reduction lasts around seven years, which means America would emerge from it in 2014. By some measures, households are reducing their debt burdens unusually fast, but even optimistic seers do not think the process is much more than half over.
America’s biggest problem is that its politicians have yet to acknowledge that the economy is in for such a long, slow haul, let alone prepare for the consequences. A few brave officials are beginning to sound warnings that the jobless rate is likely to “stay high”. But the political debate is more about assigning blame for the recession than about suggesting imaginative ways to give more oomph to the recovery.
Republicans argue that Barack Obama’s shift towards “big government” explains the economy’s weakness, and that high unemployment is proof that fiscal stimulus was a bad idea. In fact, most of the growth in government to date has been temporary and unavoidable; the longer-run growth in government is more modest, and reflects the policies of both Mr Obama and his predecessor (see page). And the notion that high joblessness “proves” that stimulus failed is simply wrong. The mechanics of a financial bust suggest that without a fiscal boost the recession would have been much worse.
Democrats have their own class-warfare version of the blame game, in which Wall Street’s excesses caused the problem and higher taxes on high-earners are part of the solution. That is why Mr Obama’s legislative priority before the mid-terms is to ensure that the Bush tax cuts expire at the end of this year for households earning more than $250,000 but are extended for everyone else.